United States v. Rush

decided: March 20, 1981.

UNITED STATES OF AMERICA, APPELLEE,v.MICHAEL A. RUSH, APPELLANT

Upon appeal from a judgment of conviction, after jury trial, entered in the District of Connecticut, T. F. Gilroy Daly, District Judge, of conspiracy to violate the federal narcotics laws, the Court of Appeals affirmed for the reasons set forth in this opinion. Affirmed.

Before Friendly, Mulligan and Timbers, Circuit Judges.

Author: Per Curiam

Appellant Michael Rush was charged with a single count of conspiracy to import marijuana into the United States with intent to distribute it in violation of 21 U.S.C. § 841(a)(1) (1976). He was tried before T. F. Gilroy Daly, District Judge, and a jury. The jury returned a verdict of guilty. From the judgment entered thereon, appellant has taken this appeal. We affirm.

I.

The government claimed, and the jury found, that appellant, a medical doctor, lent a total of $25,000 in two transactions to his co-conspirators to finance the purchases of marijuana from sources in the Bahamas. Appellant's co-conspirators repaid the principal amount of the loan and $15,000 in interest. The proceeds of the loan were used to import marijuana on at least three occasions. The marijuana was distributed in Florida.

Appellant contended at trial that, at the time he made the loan, he had no knowledge of the use to which the loan proceeds were to be put. On appeal, appellant conceded that he had such knowledge, but asserted three further contentions. The questions before us on appeal are (1) whether, even assuming there was probative evidence of appellant's guilty knowledge, he properly could be found to have become a "part" of the conspiracy; (2) whether the jury instructions were proper; and (3) whether the district court erred in refusing to give an alternate reading of the trial transcript to the jury or in refusing to disclose to the jury that there was a question as to the accuracy of the transcript. We shall discuss each of these questions in turn.

II.

Appellant's argument that he could not be convicted even though he was "fully aware of the scope and object of the conspiracy" is neither novel nor compelling.

Appellant argues that he never became a "part" of the conspiracy because, under the conspiratorial agreement, he was not to share in the proceeds of the unlawful venture and because his loans to the co-conspirators were fully secured. These facts are said to establish that appellant had only the intent of a lender to profit from a loan transaction and lacked the intent of a criminal to enter into or to effectuate an agreement to violate the laws of the United States. In support of this analysis, appellant relies upon United States v. Falcone, 109 F.2d 579 (2 Cir. 1940) (L. Hand, J.), aff'd, 311 U.S. 205, 85 L. Ed. 128, 61 S. Ct. 204 (1941). The Court held in Falcone that a jobber in the sugar trade could not be found guilty of conspiring to manufacture illegal liquor merely because he knew that the wholesaler to whom he sold the sugar in turn would deliver it to illegal distillers. This Court on several occasions has stressed that Falcone should be limited "to its strict facts-the case of a supplier of goods, innocent in themselves, who does nothing but sell those goods to a purchaser who, to the supplier's knowledge, intends to and does use them in the furtherance of an illegal conspiracy." United States v. Tramaglino, 197 F.2d 928, 930 (2 Cir.), cert. denied, 344 U.S. 864, 97 L. Ed. 670, 73 S. Ct. 105 (1952); see United States v. Piampiano, 271 F.2d 273, 274-75 (2 Cir. 1959). See also Direct Sales Co. v. United States, 319 U.S. 703, 711, 713, 87 L. Ed. 1674, 63 S. Ct. 1265 (1943).

Falcone is not relevant here at all. Rush was not a supplier of goods or commodities which were to be utilized in an illegal venture; he supplied the cash which made the illegal venture possible.*fn1 Rush was a podiatrist and a partner of one Leroy Myers in the Emerald Hills Flying Service. He was not a money lender. He became one only to finance this venture at an exorbitant and usurious profit, knowing full well the source of the proceeds. He acted in a secretive and clandestine fashion, obtaining first a mortgage note reflecting a 10% rate of interest. That note was recorded. A second mortgage note for $10,000 required payment of $20,000 in five days. For obvious reasons that note was never filed. In United States v. Piampiano, supra, a fruit and vegetable dealer departed from his usual business to supply sugar to an illicit distillery. This Court found Falcone inapplicable since the defendant deviated from his usual line of business to deal in a commodity almost entirely new to him in a manner inconsistent with his previous business transactions. United States v. Piampiano, supra, 271 F.2d at 274. Rush here embarked upon a new line of business not only with full knowledge of its illicit nature but through a clandestine method devised to protect him from its consequences.*fn2

We hold that there was sufficient evidence from which a properly instructed jury could find that appellant knew the borrowers' "intended illegal use", Direct Sales Co. v. United States, supra, 319 U.S. at 711 and that by making the loans he "intend(ed) to further, promote and cooperate in" their scheme. Id. "This intent, when given effect by an overt act, is the gist of conspiracy." Id. Appellant's attempt to distinguish the instant case on the ground that he had no "stake" in the illegal enterprise is unpersuasive. The role of appellant here and that of Direct Sales Co. were equivalent in their encouragement of illegal activity on the part of those with whom they dealt.

III.

Appellant further claims that the district court committed reversible error in refusing to charge the jury in accordance with appellant's proposed instruction. That charge would have required the jury to apply the "stake in the interest" test set forth in United States v. Falcone, supra, 109 F.2d at 581, to determine whether appellant was a participant in the conspiracy.

Although the trial court is not required to use the "stake" language, United States v. Salcido-Medina, 483 F.2d 162, 164-65 (9 Cir.), cert. denied, 414 U.S. 1070, 38 L. Ed. 2d 476, 94 S. Ct. 582 (1973), the court should instruct the jury that, in order to convict, it must find that the defendant intended to further or promote the illicit scheme.*fn3 Here, the district court's charge, although colloquial, did contain the necessary elements: agreement, common objective, some act in furtherance of the objective, and knowledge. We hold that the instruction was adequate and comprehensible to the jury. We do wish to emphasize once again, ...

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